TSX up 179 Points With Industrials, Telecoms, The Biggest Gainers; Commodities Down

The Toronto Stock Exchange is up 179 points at midday, at a fresh high, with industrials (+2%) and telecoms (+1.6%) posting the biggest gains.

Commodities are the sole decliners — energy is down 1.6%, while miners is down 0.8%.

Oil traded sharply lower early on Thursday as the United States nears a deal with Iran to limit its nuclear ambitions while the International Energy Agency said it sees oil demand slowing while supply is on the rise. Gold prices held steady as the dollar weakened following a report that showed U.S. wholesale price inflation slowed last month.

TD Economics noted Canadian housing starts came in at 278.6k annualized units in April, a 30% month on month jump from March. This marked the highest print since June 2023. Meanwhile, the six-month moving average of starts increased 2.4% m/m to 240.9k units. April's increase was concentrated in the multi-family sector, with urban starts surging 34% m/m to 214.5k units. Meanwhile, urban single-detached starts increased by 6% m/m to 45.3k units. Urban starts were up in 6 of 10 provinces.

Looking at the key implications, TD said a bounce back in homebuilding was expected last month after steep declines over the Feb/Mar period. Still, it added, April's surge surpassed expectations and should offer some near-term lift to residential investment spending and overall GDP. "That said, the trend in housing starts is softening, with the 6-month moving average down 5% from its mid-2024 peak." Furthermore, "Ontario being the driver of the moderation in construction is concerning for future affordability, as housing shortages in the province are among the most pronounced of any region."

In a separate note, TD noted Canadian existing home sales were unchanged in April compared to March, coming in at a low level of 35.8k units sold. Sales declines in Alberta (-3.4% month-on-month) and B.C. (2.3% m/m) were offset by gains in Ontario (1.1% m/m) and Quebec (2.0% m/m). New listings declined 1% m/m in April. Canadian average home prices were flat in April. Prices were up mildly in Quebec (0.4% m/m), dipped in B.C. (-0.9% m/m) and were unchanged in Ontario and Alberta.

On key implication, TD noted April was yet another subdued month for home sales, as economic uncertainty likely continued to keep potential buyers sidelined. The bank said with last month's soft showing (and weak momentum heading into the quarter) it is currently tracking another decline in Canadian home sales in Q2 following their sizeable first quarter contraction.

It added: "The other side of that trend is that pent-up housing demand is building, which was already large in Ontario and B.C. even before the trade war struck. History shows that Canadian housing markets can surge after lulls, so if confidence improves later in the year (which is our view), the market could see sales pop. However, Canadian average home price growth is likely to remain a laggard for much of the year, given very loose supply/demand balances in B.C. and Ontario."

In terms of stock specific news, Enbridge said Thursday that a First Nations group will invest $715 million in the company's Westcoast natural gas pipeline system that passes through British Columbia, Alberta and the U.S. Pacific Northwest. Stonlasec8 Indigenous Alliance Limited Partnership, which represents 36 First Nations in British Columbia, will make the investment in exchange for a 12.5% interest in the system, Enbridge said.